It's in a grey area. Technically the code that comes out from the reverse engineering is not the same as the original one, is new. It's like AI mirroring the original source code, so the game sounds and feels like the original, but the code underneath is different. So it's not a direct violation of copyright, but still can be treated as case of plagiarism or fraud (in case of selling the copycat). Considering also that in the terms and conditions that people accept to play the games is clearly stated that the game you have is not a property but a license and that you are not allowed to distribute it online without permission (by piracy or selling), is possible that major company will try to use this as legal weapons to send DMCA to all modders that will use AI to heavily modify their games, especially the one under external license like the sports game. To make you an example, recently AI modders found a way to import tracks from Assetto Corsa to Codemasters F1 25, which was considered impossible up until 2 weeks ago. And not only the tracks are imported, but the adversaries ai is completely functional like it was made by codemasers itself. This could open up to deep modification of the original code and other game features in the future. For now EA hasn't said anything, but it's possible that sooner or later something will happen, especially if someone of those AI modders will try to sell his own version of the game modded.
However, considering the great potential of this new tool and the plasticity of a game like SF2, it would have been a dream to apply it and create a some kind of "DCS lite" through mods. This tool could extend the work of modders to completely change the game like happened with Falcon 4.0, which was transformed in a completely different game with BMS. Strike Fighters 2 has an immense potential if opened up to this level of modding, so it sad to see that most files are locked even to do that kind of job. I hope that in the future TK will open up to this kind of tools so that modders can continue the job that he didn't wanted to pursue. A man can dream....